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Price Signal Summary - Support In Gilts Remains Intact For Now

OUTLOOK
  • In the FI space, Bund futures remain below last week’s high. The rally May 15 resulted in a print above the 50-day EMA and was followed by a breach of a key resistance at 131.86, the May 7 high. This continues to highlight a potential reversal, however a break of 132.11, the May 16 high, is required to reinforce a bullish condition. For bears, a breach of support at 130..24, May 14 low, would instead expose key support at 129.53, the Apr 25 low.
  • Gilt futures have pulled back from their recent highs. A break of 98.76, the May 16 high, would confirm a resumption of the current bull cycle and this would signal scope for a climb towards 99.19, 76.4% of the Mar 12 - Apr 25 bear leg. Initial firm support has been defined at 97.23, the May 14 low. Clearance of this level would instead be viewed as a bearish development.

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